The United States has declared China and Russia among the worst countries in fighting human trafficking, a designation that could lead to sanctions against both nations.

In its annual report on human trafficking released Wednesday, the U.S. State Department downgraded China and Russia, along with Uzbekistan, to the lowest possible U.S. rating, known as Tier Three.

Iran, North Korea, Cuba, Sudan and Zimbabwe are the other Tier Three countries.

In the report, U.S. Secretary of State John Kerry said the United States has a moral obligation to meet the challenge of ending human trafficking. He called the practice an assault on freedom and basic human dignity.

The U.S. estimates that 27 million people remain enslaved around the world.

The report described China as a "source, transit and destination country" for men, women and children subjected to forced labor and sex trafficking. It also said the Chinese government’s one-child policy has resulted in a ratio of 118 boys to 100 girls, creating a demand for the trafficking of foreign women as brides and for forced prostitution.

On Russia, the report said an estimated one million people are exposed to “exploitative” labor conditions characteristic of trafficking cases, such as non-payment for services, physical abuse and very poor living conditions.

Uzbekistan was downgraded because of its state-sanctioned use of forced labor in its annual cotton harvest.

U.S. President Barack Obama will determine by September whether to order sanctions against China, Russia and Uzbekistan.